Question

When an organization is thinking about differentiation, what should they be looking for and thinking about?

Do they need to be completely different from their competition in every way? Do they need to be just slightly different? Does the answer depend upon the situation?

Answer 1

Differentiation means offering variety of products . It may be launching a product with different utilities, color, features and prices so that it can tap every types of customers. It has strategic orientation too. It will provide competitive advantage in the marketplace. When company sees that it is losing the market share then it strategically revamps the market pie. For example : Apple started differentiation strategy by offerings different types of smartphones which is tapping almost each type of customer segments.

Yes , it is a strategy to make different features, quality and performance standards inherited in products offerings. If , companies will not ready to accept the challenging initiatives taken by its competitors then they will loose their existing as well as new customers too. Differentiation can be obtained by adopting creativity and innovation in production system, inputs, supply chain activities etc. Cutting cost should be adopted as a strategic intent or goal by the corporation.

Yes , being different can be said as differentiation strategy. For example: if , Apple will offer smartphones which are likely to counter the Samsung galaxy note series then it must have to offer some variants. In automobile sector, Toyata fortuner can be said as the variant of ford endeavor a large segment SUVs.

Offcourse adopting a differentiation strategy will depend upon the external environment in which business will operate. For example: Ford might successful with one or two offerings in US market but to tap Indian market where income based segmentation will force it to offer various types of passenger car and luxury vehicles.